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Sector Snap: LDK Misses Payment, Solar Stocks Fall

The solar sector took a hit Tuesday during a broad market sell-off after LDK Solar said it would not make an interest payment on a bond that comes due on Wednesday. LDK Solar Co. reported its second-quarter results Monday. The company took a loss of $165 million, compared to $254 million a year ago. However its sales dropped 51 percent to $115 million.

The solar sector took a hit Tuesday during a broad market sell-off after LDK Solar said it would not make an interest payment on a bond that comes due on Wednesday.

"We are still try to run offshore cash and at this moment that we have not have sufficient money yet so we have not made the commitment to pay tomorrow," Chief Financial Officer Jack Lai said in a conference call. "So definitely there will be a delay in this payment."

LDK Solar Co. reported its second-quarter results Monday. The company took a loss of $165 million, compared to $254 million a year ago. However its sales dropped 51 percent to $115 million.

In March Suntech Power Holdings Ltd., one of the world's biggest solar panel manufacturers, defaulted on a $541 million bond payment. Suntech ran short of cash after taking big losses in 2012 and is working to restructure its debt.

Solar panel prices have plunged in recent years because manufacturing capacity increased and renewable energy subsidies started shrinking, resulting in an oversupply of photovoltaic materials.

Now, it appears, Beijing is no longer willing to step in and bail out solar companies that get into trouble and sector shares, particularly companies based in China, took a beating.

LDK Solar shares fell 17 cents, or 9.8 percent, to $1.57 in afternoon trading.

SunPower Corp. declined $1.38, or 6.1 percent, to $21.39 and SunEdison Inc. stock gave up 58 cents, or 7.3 percent, to $7.35. Trina Solar Ltd. shares retreated 54 cents, or 5.8 percent, to $8.76 and Yingli Green Energy Holdings Inc. stock dropped 28 cents, or 6.5 percent, to $4.08. Canadian Solar Inc. stock shed 94 cents, or 7.2 percent, to $12.09. Enphase Energy Inc. slumped 28 cents, or 3.9 percent, to $6.95. Suntech shares dipped 3 cents, or 2.6 percent, to $1.06 and JA Solar Holdings Co. lost 53 cents, or 6.4 percent, to $7.78.

First Solar Inc., the largest U.S. solar company, fell 4 percent to $37.26.

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